We’re celebrating a serious milestone this month.
12 years in the past — in April 2009, to be precise — the world of startup investing was reworked.
This transformation ushered in a brand new period of enterprise alternatives for entrepreneurs…
And new revenue alternatives for buyers such as you.
However as you’ll see immediately, the revolution has solely simply begun…
Crowdfunding is Born!
What’s this milestone I’m referring to?
The launch of Kickstarter.com, the world’s first crowdfunding platform.
Earlier than Kickstarter got here alongside, entrepreneurs had few methods to fund a brand new enterprise concept:
- They may go hat in hand to family and friends.
- They may get a mortgage from a financial institution.
- Or, in the event that they lived in the correct metropolis and had the correct connections, they might pitch skilled buyers.
However on April 28th, 2009, Perry Chen, Yancey Strickler, and Charles Adler launched Kickstarter — and gave entrepreneurs a new approach to get funding.
Mainly, entrepreneurs may submit their concept on Kickstarter, and hundreds of individuals from internationally may commit small quantities of cash to help it.
In different phrases, as a substitute of getting one or two huge checks from banks or enterprise funds, entrepreneurs may now acquire a number of small checks from “the gang.”
A New Crowdfunding Revolution
Kickstarter has had super success over the previous 12 years.
As of immediately, it’s helped elevate over $6.5 billion for numerous tasks. And helped launch over 218,000 companies.
However for entrepreneurs and buyers, Kickstarter was only the start.
As soon as Wall Road and the federal government noticed what was taking place, they determined to take the Kickstarter “crowdfunding” idea a step additional.
You see, should you contribute to a venture on Kickstarter, you don’t personal a chunk of the enterprise behind it. So if one of many corporations you fund turns into the subsequent Google, Uber, or Fb, you don’t get a cent of the upside.
Which is why, in 2016, the SEC enacted a brand new set of legal guidelines that permits people such as you to again a brand new startup concept — and obtain an precise possession stake within the enterprise.
This idea is named “fairness crowdfunding.” And similar to Kickstarter, it’s been on an absolute tear…
The First Crowdfunding “Unicorn”
Fairness crowdfunding has solely been round for six years. However in that point, the business has made monumental strides.
For instance, in 2016, the primary yr that fairness crowdfunding platforms existed, startups raised simply $27 million. However based on Forbes, in 2021, fairness crowdfunded startups raised over $400 million. That’s near 1,500% development in just some quick years.
On high of that, most of the startups popping out of the fairness crowdfunding world have grow to be very profitable — and are already delivering huge returns to their early buyers.
For instance, banking startup Mercury is reported to be fairness crowdfunding’s first “unicorn.” In different phrases, the corporate is now valued at over $1 billion.
Extra Positive factors to Come
Our group right here at Crowdability couldn’t be extra excited.
We based Crowdability almost eight years in the past as a result of we believed fairness crowdfunding can be transformational:
We believed it will rework the lives of entrepreneurs launching corporations… and rework the lives of buyers such as you who backed them.
It’s been really rewarding to see that imaginative and prescient play out simply as we’d hoped and anticipated.
However we all know we have to do extra to coach and defend buyers as they enter this new world.
So should you haven’t achieved so already, try our free reviews, movies, and assets. These will assist you to shortly rise up to hurry on fairness crowdfunding.
We’ve already witnessed explosive development on this market. However as I discussed earlier, the revolution has solely simply begun!
Comfortable investing.
Finest Regards,
Wayne Mulligan
Founder
Crowdability.com
